OTTAWA (Reuters) - Commercial borrowing by small businesses in Canada dipped at the start of 2016 as the economy continued to feel the pain from the downturn in energy prices, data from PayNet showed on Tuesday.
PayNet’s Canadian small business lending index edged down to 129.6 in January from 131.1 in December. The measure of lending to medium-sized businesses showed more strength, rising to 241.1 from 234.9.
But both measures were still down compared to a year earlier, with small business lending down 1 percent and borrowing by medium-sized firms down 6 percent.
While Canada is more than just oil production, the downturn in the energy sector is having an impact on other parts of the economy, said PayNet’s president Bill Phelan.
“What’s happening is there’s a contagion effect occurring,” he said.
Businesses outside the sector felt the pinch, with industries including accommodation and food, and construction seeing a slowdown in lending, Phelan said.
While delinquency rates were relatively low, the pace of recent increases was a concern. The number of small businesses that were 30 days or more behind on their loans edged up to 1.0 percent from 0.92 percent. Delinquencies were also up compared with the year earlier.
“When you see the past dues going up like that, it’s more than just fear, there’s some real financial stress starting to emerge,” said Phelan.
Companies that were 90 days or more late on their loans remained at 0.33 percent.
Reporting by Leah Schnurr; Editing by Andrew Hay